CoPS/IMPACT Working Paper Number G-329

Title: Creating USAGE-OCC: a CGE model of the U.S. with a disaggregated occupational dimension

Authors: Peter B. Dixon and Maureen T. Rimmer


We created the USAGE-OCC model of the U.S. by adding to USAGE occupation-industry matrices for 2019 that identify numbers of people employed and wagebills in 233 occupations (aggregated from 789 6-digit BLS occupations) and 392 industries (BEA input-output). The aggregation from 789 to 233 occupations was performed in a way that minimized the loss of skill/experience/education detail. In specifying occupational mobility, we took account of: wage differences between occupations; physical requirements of occupations; and education/training/experience requirements. As well as providing detailed occupational projections, USAGE-OCC can generate results for employment by wage band, educational requirements and experience. In an illustrative application, we simulated the effects of a mandated 10 per cent increase in real wage rates in low-wage occupations. The results point to the idea that rectifying inequitable wage disparities without adverse employment effects requires policies such as negative tax rates that raise incomes for low-wage workers without increasing costs to employers.

JEL classification: J62; J24; J31; C68.

Keywords: Employment by occupation and industry; Occupational mobility; Labor-market modeling; Wage increases in low-wage occupations

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